A comprehensive guide on crypto currency scams and ways to evade them

It is often said that technology can serve the purpose of a dual edged sword. This is applicable to Bitcoin and other types of crypto currencies as well. With time, the number of people investing in bitcoin and block chain technology is going up. From celebs to business tycoons, everyone is endorsing different types of crypto currency. This has been noticed by the hackers and malicious web users and as a result, the risk factors associated with crypto currency sector have multiplied in recent years!  The lack of regulation in this industry is another reason behind the growing number of crypto scams.

Need to become aware about crypto currency sector scams

Of late, the instances of fraudulent activities concerning bitcoin and other popular crypto currencies have gone up significantly. The crypto scamstars are a step ahead of the general users, as it turns out often.

The crypto currency sector scams flourish and evolve- taking advantage of the lack of clarity on blockchain tech. A section of the beginners in this industry often get carried away by lofty dreams of getting rich by investing in crypto currency and they mistake it as a shortcut.  This lack of knowledge and greed makes them vulnerable to the traps laid by the scam artists!

The major crypto currency scams and ways to identify and evade these

If you are venturing into the volatile world of crypto currency, it is imperative that you learn about the major types of scams. It is also necessary that you learn the ways to spot such frauds and stay safe.

  • Phishing scams- Phishingh scans are not exactly new and they have cost a lot of bank customers dearly. In this case, it happens a bit differently. You may receive unexpected email which seems to have been sent by the wallet provider or a valid crypto exchange. Typically, such emails contain links to some sites which resemble much like authentic wallet or exchange websites. However, this is actually a trap laid carefully! It is a ploy but the cunning scam stars to obtain your personal data and misuse it thereafter.

    When you suspect such an email to be dubious, ensure you check the URL carefully. Evade opening any link given in such emails randomly. The most important thing is you should not give away the private keys to such sites.
  • Fake crypto wallets and exchanges- There are some fake crypto exchanges and wallets and they can be actually quite deceptive, especially for the new users. These fake exchange operators are on prowl to snatch your money-regardless of how authentic they appear. Some of these fake crypto exchanges go a step ahead and offer bonuses in turn for large deposits. They may even use pop ups to make the users deposit money. 

    The fake wallets also resemble legitimate ones and dupe the unsuspecting users. They eventually get caught but manage to rob several inexperienced users of their wealth.

To stay away from fake crypto wallets and apps, you need to have a sharp eye. Do not get carried away by ads and claims of big returns. Check the review of such wallets in the Play store- to begin with. Check for the company’s image and reputation in the web as well.

  • Old school crypto scams- The old school Bitcoin scams still exist and the beginners in this sector may fall prey to those. These can include random phone calls and fake email from a scam star masquerading as an official in the IRS. The best thing you can do is ignoring such fake calls and emails. No Law enforcement official or tax department staffs will call you up or send email to clear any dues in crypto currency!
  • Pyramid/ponzi schemes- The ponzy schemes are not new but the crypto currency segment is witnessing an influx of such schemes in recent years. The crypto ponzi schemes woo newbies with promise of high returns if they invest in a scheme. The first investors receive returns which are actually the investments made by next lineup of investors. Naturally, they get excited and encourage more people to sign up. After a time, the influx slows down and the original scheme promoter escapes with the collective investment.

    To be safe from such crypto ponzi schemes, evade people or agencies that offer new cryptocurrency project ideas which involve you encouraging others to invest and join a scheme.
  • Cryptocurrency malware- Malware is not a new threat for web users but crypto sector malware is more specifically designed. These malware do not target the PC hardware or applications. These malware are made to find loopholes in security of your crypto wallet and accounts. Once such malware finds any loophole in the system, it tries to steal sensitive data and keys. To keep such menaces at bay, update your PC or mobile security software regularly. It is also useful to update firmware of your crypto hardware wallet.
  • Fake ICO scams- These scams have surfaced in the last few years. The scammers create fake but authentic looking websites for launching a fake ICO. The real scamming commences once the fake website for the ICO is up and running. The scammers unveil their Initial Coin Offering. To buy the ICO, you need to pay using bitcoin or similar crypto coins. To stay safe from such fake ICO scams, do adequate research on the company and then proceed. There are authentic ICOs as well.

Summing it up

The cryptocurrency sector is still in a nascent phase and rapid evolution has become its quintessential trait! The scam stars will devise new ways of duping the users-for sure. Apart from the prevalent crypto scams and fraudulent activities, more will be caught in the future. If you are thinking of investing in this sector- it is important to polish observation skills. You should be knowledgeable about traits of various crypto scams and update your knowledge in the best way. You should also evade getting lured by cryptocurrency agencies or websites offering stuffs that are too lucrative.

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